Did you know that submitting a mismatched Taxpayer Identification Number (TIN) and name combination can result in fines?

If a mismatched name/TIN combination is submitted on your W-2 or 1099 filings, the IRS will issue a CP21000 or CP2100A Notice if the payee’s name and TIN do not match IRS records. This notice indicates that there is a discrepancy between the information you provided and the IRS’s records.

What happens next?

  1. Receiving the Notice: When you receive a CP21000 or CP2100A Notice, it lists the mismatched names and TINs.

  2. Action Required: You are required to address these mismatches by reaching out to the payee to obtain the correct information.

  3. Providing Proof: If you cannot obtain the correct information, you need to demonstrate that you made a good faith effort to do so. This includes keeping records of your attempts to contact the payee and request the correct details.

  4. Backup Withholding: If you are unable to obtain the correct TIN, you must begin backup withholding at a rate of 24% on any future payments to that payee. This means you will withhold a portion of the payee’s payment and submit it to the IRS to cover potential tax liabilities.

Preventative Measures: To avoid such issues, we recommend the following:

  1. Annual Collection of W-9 Forms: Ensure you collect updated W-9 forms from all independent contractors annually. This form verifies the payee’s name and TIN.

  2. Verification: Use the IRS’s TIN Matching Program to verify the accuracy of the information provided by your payees before filing your returns.

  3. Record Keeping: Maintain meticulous records of the W-9 forms and any communication with payees regarding TIN discrepancies.

These steps can help ensure that your filings are accurate and minimize the risk of receiving mismatch notices from the IRS.

Still, have questions?
Contact Pro Advisor Support to answer your questions.

Clergy Financial Resources
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11214 86th Avenue N.
Maple Grove, MN 55369

Tel: (888) 421.0101
Fax: (888) 876.5101

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Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.

This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.

For more information or if you need additional assistance, please use the contact information below.

Clergy Financial Resources
11214 86th Avenue N.
Maple Grove, MN 55369

Tel: (888) 421-0101 
Fax: (888) 876-5101
Email: clientservices@clergyfinancial.com

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